July 14 (Bloomberg) -- Hamburg expects a court to clear the
path for dredging the navigation channel in the river Elbe in
September, allowing for a rise in cargo volumes at Europe’s
second-biggest container port after years of delay.

The city believes it will overcome a lawsuit from
environmental groups NABU and BUND at hearings at Germany’s
highest administrative court in Leipzig starting July 15,
Hamburg city Economy Minister Frank Horch said in an interview.

“The European Commission has already approved the
adjustment of the navigation channel following a diligent
examination of the project,” Horch said. “That makes us
hopeful that the court acknowledges these very extensive and
precise considerations of all environmental standards.”

Hamburg, located about 130 kilometers (81 miles) upstream
from the North Sea, says deepening and widening the channel is
necessary because ultra-large vessels can’t leave and enter its
port fully loaded and face tide restrictions. The global fleet
of container ships that can carry 14,000 standard boxes or more
is forecast to triple by the end of 2016 with the biggest
carrying more than 18,000, according to the June Global Port
Tracker report.

Hamburger Hafen & Logistik AG, the handler of three in four
containers at the port, currently needs extra staff and
equipment to deal with peak traffic. Dredging would provide more
time to handle containers and increase ship utilization, HHLA
said on June 19. Volumes may rise, while HHLA may increase
terminal prices, Christian Cohrs, an analyst at M.M. Warburg,
said in a July 4 note.

Medieval Times

Hamburg, once a member of the Hanseatic League, has
repeatedly adjusted the Elbe’s passage since medieval times. The
planning for the current project, which calls for a deepening of
the navigation channel by about 1 meter as well as a widening in
some sections to allow large vessels to pass each other, started
in 2007.

The plans have been held up for about five years amid
environmental and safety concerns before a court blocked the
start of the dredging in 2012, adding to the risk that cargo is
diverted to deeper competing harbors such as Rotterdam.

“This dredging project would have a lasting effect, as I
am convinced that the growth of vessels sizes has come to an
end,” said Horch.

About two-thirds of containers handled in Hamburg are
carried by ships with a draft deeper than 12.5 meters, according
to the UVHH association of port businesses.

The court has scheduled six hearings from July 15 to July
24 with an option for three more in the last week of July,
according to spokeswoman Ina Oertel. That’s about twice as many
days as normally allotted, she said.

This may indicate the court is “willing to bring the
dispute to a happy end rather than transferring it to the
European Court of Justice -- which would imply another delay,”
said M.M. Warburg’s Cohrs. He added the outcome still “seems
uncertain.”

Horch expects a verdict within six to eight weeks after the
last hearing. Following a positive result, Hamburg could start
some of the dredging, while other works would need to tendered
on a European basis, a process of another four to six months, he
said. The dredging would need about two years to complete. HHLA
said it expects to see the first positive effects a year after
the start of the dredging.

A dredging can provide “a relief, but no remedy,” Cohrs
said. In contrast to Wilhelmshaven and Rotterdam, ultra-large
vessels remain dependent on the tide when entering or leaving
Hamburg fully loaded, which is a clear competitive disadvantage,
he said. To make up for it, Hamburg must maintain its superior
positioning for inland train and truck connections and its link
to the Kiel Canal, The world’s busiest artificial waterway, the
analyst said.